Electro-optical incremental encoders or transducers are known for measurement of linear or rotary motion or position. Such encoders include a scale of alternately light responsive and opaque segments which is cooperative with an optical head to provide an optical pattern representative of motion of the head relative to the scale. Electrical signals are derived from the optical pattern which represent the relative motion, and these signals are usually processed to produce a digital count indicative of distance travelled by the head relative to the scale. Scale errors such as variations in the width and spacing of the scale segments can cause errors in measurement of distance along the intended path. Such errors can become significant especially in high resolution encoders in which a high density optical pattern is provided on the encoder scale. Scale error has been treated heretofore by adjustment in the encoder electronics to add or subtract a single count at predetermined intervals of distance along the scale to alter proportionally the total count in order to minimize the error component. This type of compensation is not satisfactory in that the count correction is made in a single step at predetermined intervals of encoder travel, and the compensation is especially unsatisfactory if motion is being sensed in the vicinity of the scale at which the compensating count is provided. Similar errors can occur in position encoders or transducers of other than electro-optical type.